Will EU’s new approach to China deliver results?

14 mins read

May 7, 2024 7:22 am CET

DRIVING THE DAY: EU-CHINA

THE EMPEROR IN EUROPE: On his first state visit to an EU country in five years, Chinese President Xi Jinping may have arrived in Paris aiming to divide and conquer. But unlike back in 2019, Xi found an EU that was much better prepared and more coordinated … despite some hiccups that betrayed fault lines in the joint front.

Gun on the table: In contrast to their previous meetings with Xi, French President Emmanuel Macron and European Commission chief Ursula von der Leyen were negotiating from a position of strength. Ahead of the meeting, the EU launched a series of investigations against Chinese products, and is preparing to impose anti-subsidy tariffs on Beijing’s electric vehicles, as first scooped by Playbook.

The stakes are high for Xi: China has invested billions in its electric vehicle industry, and millions of jobs depend on it. And the EU is China’s top customer, accounting for around 40 percent of the country’s EV exports. That’s not surprising, given the U.S. and others including Turkey have already imposed additional duties on Chinese EVs. Europe is one of the few big markets that remain open — and Beijing has a major interest in keeping it that way.

JOINT FRONT: Macron and von der Leyen on Monday jointly took on Xi, with clearly defined roles …

**A message from the Future Talent Summit: Join AI experts, business leaders and policy makers at the Future Talent Summit in Stockholm on June 18-19 and listen to some of the most influential visionaries of our time - Yuval Noah Harari, Vivienne Ming and Geoff Colvin on how AI will impact the future of Society, Business and Education. Learn more.**

Von der Leyen was the bad cop, vowing to defend the EU’s industry and workers against “flooding” with “China’s surplus production” of EVs.

Macron was the good cop, with a weakness for cognac. He largely avoided the sensitive electric vehicle fight, and instead delivered the positive messages: China, he said, would back France’s call for a pause in the Russia-Ukraine and Israel-Hamas wars in an “Olympic truce” during the Summer Paris Games.

On paper, the first day of Xi’s visit was a success for Team Europe: Xi did indeed call for a “worldwide truce” during the Olympics. He also — supposedly — promised not to support Russia in its war against Ukraine (not that anyone is particularly convinced, given Xi’s “no limits” friendship with Vladimir Putin). According to Macron, Xi promised not to export any weapons and to “control strictly the exports of dual-use goods” to Russia.

Big question 1: Will Xi’s promises to Macron and von der Leyen amount to anything, or were they just more hot air?

Likely answer: Hot air. China has over the past months sharply increased its sales to Russia of parts used in cruise missiles and drones. And Xi made similar promises not to aid Moscow’s war effort before, as Macron himself pointed out during his press statement alongside the Chinese leader: “It’s what you had told me very clearly, Mr. President, a bit more than a year ago, and which you have now repeated.”

Big question 2: Will the EU cave on the EV investigation?

Likely answer: It’s possible. After the meeting with Xi, von der Leyen said the EU would “closely coordinate with G7 countries and emerging economies” to tackle “China’s market distortions.” Was that a hint the EU could drop its own measures, such as the anti-subsidy tariffs, and instead seek a joint approach with allies (many of whom have already taken punitive steps)?

Cognac-induced hiccup: Macron on Monday called on Xi not to target French cognac exports in retaliation for potential EU tariffs on Chinese EVs. It’s not a good look for the president of one of the EU’s leading industrial nations to signal he’s intimidated by liquor tariffs. Coincidentally, the world’s richest man Bernard Arnault, the boss of luxury firm LVMH, which sells cognac as well as handbags, was invited to the state dinner with Macron and Xi.

What’s next: If Xi’s aim is to divide and conquer Europe, his decision to travel from Paris to Hungary and Serbia shouldn’t worry the EU too much. Serbia isn’t even in the EU, and what could Viktor Orbán do that he hasn’t already? Try to block aid to Ukraine? Undermine democracy? Help autocrats?

Reminder: Hungary can’t legally block anti-subsidy duties against Chinese EVs, because the EU has exclusive powers over trade. Xi would need to patch together a qualified majority of EU countries to have any hope of averting the measures.

BACK TO THE OLYMPICS: Though Xi and Macron spoke cordially of the Paris Games bringing the world together, the head of the top U.S. anti-doping regulator was in no mood to be diplomatic: Chinese drug cheats and officials willing to turn a blind eye threaten to make the Paris games a “train wreck,” Travis Tygart, the boss of the U.S. Anti-Doping Agency, said in an exclusive interview with POLITICO’s Ali Walker and Claudia Chiappa.

PUTIN THE DICTATOR PUTS ON A SHOW

VLADIMIR CELEBRATES HIMSELF: Vladimir Putin will today celebrate the inauguration of yet another term as Russia’s “president,” after a sham election that failed democratic standards.

Will anyone show up? Ahead of today’s show in Moscow, there was controversy in Brussels over reported (and later denied) plans by the EU’s ambassador to Russia to attend the inauguration, alongside his French counterpart.

Letter to Borrell: The European People’s Party, the largest political group in the European Parliament, sent a strongly worded letter to the EU’s top diplomat Josep Borrell, obtained by Playbook, warning that Putin’s election “lacked any democratic legitimacy” and asking Borrell to issue a recommendation to all EU ambassadors not to participate in Putin’s show.

Don’t do it! “The EU and its member states should boycott the inauguration ceremony,” EPP leader Manfred Weber said in a statement.

And I’m telling you, I’m not going! An EU spokesperson said its ambassador won’t attend, adding that the participation of other European ambassadors was for their governments to comment on.

What to watch today: The results of a government reshuffle, as dictated by Russian law. It could give us a rare insight into Putin’s state of mind ahead of another six-year term, my colleague Eva Hartog reports today.

MORE EU-RUSSIA

VOICE OF EUROPE SANCTIONS: The European Commission is expanding sanctions imposed by Czechia against alleged pro-Russian propaganda network Voice of Europe to make them EU-wide, my colleagues Pieter Haeck and Jacopo Barigazzi report. It is one of four media entities to be added to the sanctions list as part of the EU’s 14th package of measures against Russia, according to a document dated May 3 and seen by POLITICO.

Voice of Putin: Commission Vice President Věra Jourová hinted at sanctions against Voice of Europe in an interview with Czech TV on Sunday, saying: “We do not consider them to be media, but tools of Putin’s propaganda.” It comes after the Czech Republic sanctioned the media outlet at the end of March for an alleged pro-Russian influence operation believed to be aimed at interfering in the EU’s June election.

Slovak update: The Slovak interior ministry told Playbook it is “investigating” reports it had granted temporary protection to Czech-sanctioned Artem Marchevskyi over his involvement with the Voice of Europe.

MEANWHILE — EU’S PLAN TO BREAK THE RUSSIA ASSETS STALEMATE: Brussels is considering allowing neutral countries to opt out of its proposal to use the profits of Russia’s frozen assets to buy weapons for Ukraine, six EU diplomats told POLITICO.

How it’ll work: Ahead of a meeting on Wednesday at which the Belgian Council presidency hopes to strike a deal to unlock funding for Ukraine, a new text was circulated that proposed capitals that oppose military aid could limit themselves to providing humanitarian assistance to the war-struck country.

The last-ditch attempt could win over the likes of Austria, Malta, Cyprus and Ireland, who want an exemption from buying ammunition, but it will not assuage all concerns, as Gregorio Sorgi reports. EU countries that are also members of the G7 — Germany, France and Italy — are wary of the proposal because of legal and financial risks, according to an EU diplomat, and are not expected to support the deal on Wednesday.

ROAD TO EU ELECTION

CALL FOR SOLIDARITY AFTER ATTACKS: The assault on Socialist MEP Matthias Ecke on the campaign trail in east Germany on Friday — which caused injuries that required surgery — is reverberating in the European Parliament. Renew, the S&D, Greens and the Left groups are calling for Parliament’s political leadership, the Conference of Presidents (CoP), to issue a statement condemning the violence against Ecke and other politicians.

The call: In an email seen by POLITICO, S&D leader Iratxe García Pérez said: “I have called the European Parliament President [Roberta] Metsola together with the other pro-European leaders of this house to adopt a strong and concise CoP statement in defense of democracy … It’s time to show unity against those who want to destroy our democracies.”

The S&D is also calling on Commission President von der Leyen and other political parties “to firmly reject any normalization, cooperation or alliance with the far right.” García’s office told Playbook the EPP has until midday to decide if it will back a statement.

Meanwhile, in Germany: The interior ministers of Germany’s 16 states will hold a meeting today to discuss ways to prevent further attacks on politicians, Reuters reports. Measures they’re considering include more police at political events and better protection of politicians’ privacy.

DATA BREACH: The European Parliament informed dozens of job applicants on Monday about a data breach in its online recruitment application. Playbook has seen an email sent to several affected users informing them the breach may have involved files they uploaded, along with “some other documents created by Parliament during the recruitment process.”

Official response: A Parliament spokesperson said the recruitment application was suspended and fixed “as soon as the vulnerability was identified,” and it is still analyzing the impact. The spokesperson added that the breach had been identified as a result of “intensified efforts” against “hybrid threats” in the lead-up to the EU election. Data protection authorities have been notified.

**POLITICO is back at the 2024 Milken Global Conference. We’ll again be your eyes and ears at the 27^th Annual Milken Institute Global Conference in Los Angeles from May 5-8 with exclusive daily reporting in our Global Playbook newsletter. Suzanne Lynch will be on the ground, covering the biggest moments, behind-the-scenes buzz and on-stage insights from global leaders. Subscribe today.**

GAZA WAR

ON THE BRINK: Hopes of a cease-fire were raised last night, but were quickly dampened when Israeli leaders authorized a military operation in the city of Rafah, where some 1.4 million Palestinians are taking refuge.

What happened: After reports emerged that Hamas had accepted an Egyptian-Qatari cease-fire proposal that would lead to the release of Israeli hostages, Israel said the deal did not meet its “core demands.” Israeli Prime Minister Benjamin Netanyahu’s office said later that he would send a delegation to meet with negotiators to try to reach an agreement.

In the meantime, strikes start: While U.S. President Joe Biden reiterated his concerns about the invasion of Rafah in a call with Netanyahu on Monday, Israel launched strikes after ordering 100,000 people to evacuate the city’s east. Palestinian and Egyptian officials said Israeli tanks have reached Rafah, AP reported, though there were hopes the operation could be limited in scope.

IN OTHER NEWS

MUSCAT CHARGED: Former Maltese Prime Minister Joseph Muscat is facing criminal charges in connection with a controversial deal to privatize three state-run hospitals. Muscat — a former MEP who was PM from 2013 to 2020 — his former chief of staff Keith Schembri and former Cabinet minister Konrad Mizzi are among 19 people charged following a yearslong inquiry into alleged corruption when the three hospitals were sold to the Vitals Global Healthcare group in 2016. In a Facebook post on Monday, Muscat described the prosecution as a “disgrace and abomination” and vowed to fight it.

BREXIT BLAME GAME IS BACK: The head of Germany’s main opposition party has said Brussels and Berlin are partly to blame for the U.K.’s departure from the EU, according to the Financial Times. Friedrich Merz, head of the center-right Christian Democrats, said the EU could’ve helped David Cameron win the 2016 referendum by giving Britain meaningful concessions.

TELEGRAM MODERATION: Social media app Telegram will be overseen by Belgian authorities as it seeks to comply with new rules under the EU’s law on policing content on platforms. Pieter Haeck has the details.

TRUMP LATEST: Former U.S. President Donald Trump said he would rather go to jail than comply with a gag order in his ongoing criminal trial for allegedly falsifying company documents to conceal hush money payments.

EUROVISION SEASON: Eurovision kicks off tonight, with the first semi-final coming to you live from Malmö. Writing for POLITICO, long-time Eurovision devotee Frances Robinson has a curtain-raiser with everything you need to know before tuning in. And my colleagues Lucia Mackenzie and Giulia Poloni have a (just for fun!) feature on who would run the EU if it was decided by Eurovision.

AGENDA

— Foreign Affairs Council 9 a.m. Arrivals and doorsteps at 8:15 a.m. Watch. Agenda.

— Employment, Social Policy, Health and Consumer Affairs Council 9:30 a.m. Arrivals and doorsteps from 8.30 a.m. … Press conference by Equality Commissioner Helena Dalli and Belgian State Secretary for Gender Equality Marie-Colline Leroy around 3:15 p.m. Full agenda. Watch.

— Press conference by Commission Executive Vice President Maroš Šefčovič, Andorran Prime Minister Xavier Espot Zamora and San Marino Foreign Affairs Minister Luca Beccari on the finalization of the association agreements with Andorra and San Marino at 4 p.m. Watch.

— Commission Executive Vice President Margrethe Vestager meets with director general of the European consumer organization BEUC Monique Goyens … meets with Japanese Minister of Economy, Trade and Industry Ken Saito.

— Home Affairs Commissioner Ylva Johansson is in Hamburg, Germany, for the ministerial meeting of the coalition of European countries against serious and organized crime.

— Energy Commissioner Kadri Simson in Katowice, Poland, at the 16th Economic Congress, participates in the opening panel session, “Europe — Transforming the Future” … delivers a keynote speech at the panel discussion on the “Energy Sector in Central Europe.”

— German Chancellor Olaf Scholz receives the Chairman of the Presidency of Bosnia and Herzegovina Denis Bećirović.

BRUSSELS CORNER

WEATHER: High of 17C, partly cloudy but clearing in the afternoon.

PRO-PALESTINE PROTESTS: Students at Ghent University occupied campus on Monday morning, calling for its board of directors to cut ties with Israel and make a stronger commitment to the green transition. The occupation is expected to last until Wednesday. The Brussels Times has more.

PORTUGUESE LANGUAGE DAY: Portugal’s embassy is organizing a seminar on multilingualism to mark World Portuguese Language Day on May 13. It will be held at the Residence Palace from 9:30 a.m. that morning. Register by emailing [email protected].

NEW BIKE LANE: Brussels Mobility has started constructing a new bike path on Boulevard de la Woluwe, between the regional border and the junction with Avenue Emile Vandervelde, to better connect Flanders and Brussels. The works are expected to finish in about two weeks.

PALACE OF JUSTICE IN BLACK AND WHITE: A new photography exhibition, “Justice for the Palais,” has opened at the Mont-de-Piété and runs until May 19.

AFRICAN DESIGNERS IN THE SPOTLIGHT: It’s fashion month at the Congolese Cultural Center from May 8.

BRUSSELS PRIDE: In the run-up to the Pride march on May 18, the city is hosting a week of concerts, screenings and other events, starting Wednesday. Program.

COMEDY NIGHT: Five international comedians will perform at La Plume Persée in Ixelles on May 11, with the former Brussels-based comic Alina Sharipova headlining. Buy tickets here.

BIRTHDAYS: Former MEPs Chrysoula Zacharopoulou, Gabriele Zimmer and Stanisław Żółtek; European Commission’s Nathalie Vandystadt; French economist Thomas Piketty; Euractiv’s Georgi Gotev; Helen Whitehead from the U.K.’s Department for International Trade; Former Dutch PM Jan Peter Balkenende.

THANKS TO: Clea Caulcutt, Paul Dallison, Sam Blewett, Playbook reporter Ketrin Jochecová, editor Alex Spence and producer Seb Starcevic.

**A message from the Future Talent Summit: Welcome to the Future Talent Summit 2024 in Stockholm on June 18-19? Here, at the heart of human capital and equal opportunity, leaders and policy makers from across the globe gather to connect, exchange insights, and delve deep into the profound effects of Artificial Intelligence on Society, Education, Business, and Innovation. The two-day agenda is filled with world renowned speakers, panel discussion, breakout sessions and networking opportunities with the objective to reimagine and shape the future y fully harnessing the transformative power of AI. Join us as we explore not only the overarching global megatrends but also the specific challenges and opportunities facing each delegate today. Learn more.**

Brussels Playbook